Pharmaceutical wholesaler prospers with new facility in place
A pharmaceutical wholesaler was referred to Hilton-Baird by their prior funder.
The business’s invoice finance facility with the prior lender had been in place for 18 months and was working well. The prior lender had more recently onboarded the business’s sister company, who are a pharmacy providing a service to the NHS, as their sole debtor. Despite the client always being upfront about their way of working and the bank undertaking due diligence and underwriting the facility, it transpired that their prior lender hadn’t fully appreciated that this business operated on an accrual basis with the NHS, with advance payments but allocations not being made until a schedule of items sold is received from the NHS. Once onboarded, the prior funder naturally, therefore, found that the invoices they were funding had already been paid.
When speaking to the business, they indicated that because there are specialist pharmaceutical funders in the market, they had approached the funder on this basis to provide this service. The sister company exited their arrangement and initially sought a facility with a specialist provider who repaid the funds.
The prior funder subsequently undertook an internal review and decided they could no longer support the wholesale business, giving them 3 months’ notice, reducing their access to available funds and capping their facility at £90K, whilst ideally, they would need access to £300K.
Hilton-Baird Financial Solutions worked with the business to identify a replacement invoice finance facility as quickly as possible as cash was needed to enable the business to meet critical payments to suppliers, payroll and possibly HMRC.
Hilton-Baird identified funders who would be a good fit, specifically those with the ability to understand the business, underwrite quickly and also to be able to service their longer-term needs. A factoring facility was secured with an independent provider to enable the business continued access to the working capital it required and provide additional support through credit control.
Additionally, Hilton-Baird’s team has also delivered a trade finance option, to enable them to optimise their activities, should they wish to.
The Managing Director of the wholesale pharmaceutical business commented “Hilton-Baird were supportive throughout the whole process – from the initial call onwards.” He adds “They were able to quickly assess and understand our business and then introduce funders that could fully meet the needs of our business now and as we continue to grow. Their knowledge and expertise were key in securing the right funding partner and we now feel confident we have a long-term solution that meets our business’ needs.”